Is the political class serious about the kind of reform necessary for best use of oil revenues?

Dear Editor, I did a column a few weeks ago saying it is tricky at this point to get the contract renegotiated, let alone tearing it up. A contract is a contract in spite of the fact that Guyana did not field its best team ‒ an inclusive and multidisciplinary one. As Prof Collier noted, it really comes down to monitoring average cost of production. As a world leading development economist, he understands this point. However, I am not so sure Prof Collier underscored constitutional overhaul as a form of institutional mechanism that is needed in a bicommunal society. For many mainstream economists, institutions are rules and norms that make markets work better and enable private enterprise to take the necessary risks. These forms of institutions are no doubt essential.

However, constitutional overhaul is a form of institutional reform to make government work better in an ethnically divided society such as Guyana. I am not so sure Sir Paul Collier sees the State playing a transformative role in development; at least I did not get this point from his numerous scholarly papers I have read over the years. I have indeed profited from his seminal works. I hope President Granger and his party can see the nuances. I don’t think the AFC values such nuances.

I published a paper in 2016, ‘The political economy of Guyana’s underdevelopment’, showing how the present tinkered 1980 Burnham Constitution given pro-ethnic strategic voting is a drag on growth and development. I have developed this topic further in a forthcoming paper, ‘Politics and underdevelopment: the case of Guyana’, which will be published in a collection of essays edited by Arif Bulkan and Alissa Trotz.

Is the political class really serious about the kind of reform necessary to enable the best use of the oil revenues before the renewables bite? Yours faithfully, Tarron Khemraj